Government Files Statement Of Interest Distinguishing 'Caronia' In Off-Label Promotion False Claims Act (FCA) Case

On November 7, the U.S. Attorney's Office for the Southern District of New York filed a statement of interest in United States ex rel. Matthew Cestra, et al. v. Cephalon, Inc., et al., 10 Civ. 6457 (SHS) (S.D.N.Y.), in connection with a motion by the defendant pharmaceutical company to dismiss, based in part on the Second Circuit's decision in United States v. Caronia, 703 F.3d 149 (2d Cir. 2012).1 The Government submitted its Statement of Interest "to advise the Court of its position that the Second Circuit's recent decision in [Caronia] does not preclude a cause of action under the False Claims Act based on a manufacturer's off-label marketing of a prescription drug causing the submission of false claims to federal health care programs."2 The Statement of Interest is the first time the Government has set forth in writing its position in the Second Circuit on the applicability of Caronia to an off-label case under the False Claims Act ("FCA").3

Background

The Relator, who was formerly employed as a senior level manager by Cephalon, alleged that the company promoted two of its drugs, Treanda® and Fentora®, for off-label uses.4 According to the second amended complaint, originally filed on June 24, Treanda® was approved by the FDA only for "second-line" treatment of indolent non-Hodgkin's lymphoma ("iNHL"), which is treatment for patients whose cancer has progressed after use of another chemotherapy regimen.5 Relator alleged that Cephalon improperly marketed the drug for first-line treatment of iNHL.6 In addition, Relator alleged that Fentora®, an opiod approved to treat breakthrough cancer pain, was promoted by Cephalon for use to relieve pain not related to cancer.7 Relator alleged that the off-label promotion caused false claims to be submitted under federal health care programs, including Medicare and Medicaid.8 The United States did not intervene in the case.

On July 31, Cephalon moved to dismiss the second amended complaint on the ground, among others, that the off-label promotion alleged by Relator was protected commercial speech under the First Amendment.9 Cephalon cited Caronia for the proposition that '"the simple promotion of a drug's off-label use by pharmaceutical manufacturers and their representatives is protected by the First Amendment."10

Caronia11

Alfred Caronia was a sales representative for Orphan Medical, Inc., which sold Xyrem®, a drug approved by the FDA for treating narcolepsy in certain adults.12 Caronia was allegedly tape-recorded at speaker programs promoting Xyrem® for...